Is there remedy to avert rampant corruption in India?

As a nation, we are going through an era of name-calling about corruption that is spiralling out of control, writes Rahul Jacob

Ineffective efforts to deal with corruption seem only to have made things worse. India’s cranky legal system, its overlapping investigative agencies and its raucous media have meant that responses to the problem may have done as much to paralyse business in general as to punish wrongdoers.”

– The Economist, March 15, 2014

Almost as if the dysfunction of India’s government has the capacity to surpass even the most damning indictments, The Economist report with these words hit the newsstands about the time that news broke of a preliminary inquiry by the Central Bureau of Investigation (CBI) into the actions of former Securities and Exchange Board of India (Sebi) chairman C B Bhave in allowing Jignesh Shah’s FT Group to set up a currency derivatives exchange to compete with the National Stock Exchange.

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In an interview with The Economic Times on Monday, Mr Bhave said, “The record will show that I approved it. None of the officers who participated in the exercise ever misguided me. The buck stopped at my desk. The CBI needs to carry out whatever investigation it wants against me and me alone.”  

This forthright declaration of personal responsibility is so rare in public life today that it is almost un-Indian. But it is easier to do when the case against you seems so patently absurd.

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The notion that officials can have inquiries launched against them to investigate whether they are criminally liable for having given permission to an entity that was the subject of a (subsequently abandoned) tax inquiry is dangerous enough.  

But in a country with one of the most hyper-frenetic income tax departments in the world, this would bring business to a standstill.  

Half the multinationals in this country are in the midst of disputes with the income tax department. Should the government stop doing business with all of them even though the blame lies often with the convoluted interpretation of tax laws by the department itself, most spectacularly in the Vodafone case?

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But it is not the CBI that is at fault alone. As a nation, we are going through an era of name-calling about corruption that is spiralling out of control.  

Yes, India is one of the most corrupt countries in the world, but that only underlines why our politicians, press and investigative agencies should be more thoughtful about whom they go after: there is a lot of work to be done and there are a lot of legitimate targets to be tackled.  

The CBI’s bombshell came on the heels of the accusation from Arvind Kejriwal that the media is corrupt.  

The pervasiveness of paid news and the inability of most newspapers and TV stations to maintain a Chinese wall between owners and journalists notwithstanding, Mr Kejriwal’s blanket indictments are beginning to seem silly.

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Relatively unnoticed in India is that China is going through its own high-profile battle with corruption.  

Theirs is a top-down attempt to stamp it out by President Xi Jinping. In the past couple of weeks, reports in the state media about the corruption of family members of former internal security boss Zhou Yongkang have been widespread.  

China may soon break its code of immunity for serving or former members of its highest body, the Politburo Standing Committee, and take action against Mr Zhou. Within months of Mr Xi taking over a year and a half ago, lavish banquets by government officials were forbidden.  

Luxury goods sales in the country slowed as officials stopped accepting gifts. Nevertheless, there is little evidence that decision making is seizing up in China as has happened in India.

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Top-down moves against corruption run the risk of being seen as a vendetta. It does not help Mr Xi’s argument for cleaner governance that the targets of his anti-corruption drive such as Mr Zhou and Bo Xilai, the disgraced former party chief of Chongqing, were rivals of his. 

There have been no similar moves against former premier Wen Jiabao, despite the New York Times revelations that his various family members had amassed assets totalling $2.7 billion.

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Despite Mr Xi’s efforts, China, like India, remains deeply corrupt.  

In India, though, not only do we have the problem of investigations sometimes at the behest of political masters, but also the peculiarity that bribes do not typically spur the bureaucracy to quick action.

The country’s myriad investigations, meanwhile, lead to nothing like speedy justice. Everything continues as before with the pincer of greed and shambolic prosecutions and deliberations choking the energy out of the economy.

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Spare a thought for Sigve Brekke, one of many senior telecommunications executives awaiting clearances from the government, according to The Economic Times.  

Mr Brekke, who headed Unitech Wireless in India, moved to Bangkok months ago on a new assignment, but the bureaucrats continue their deliberations on his case.

Then there is PRS Legislative Research, one of the non-governmental organisations I most admire because it documents just how little our Parliament achieves. PRS has run afoul of the home ministry because it received funding from the Ford Foundation and the Google Foundation.  

Requests for further foreign contributions have been “denied in the public interest”. Now, along comes the news that the Election Commission wants to delay the granting of new bank licences till after the elections.  

You can never be too careful: granting L&T Finance a licence might just tip the elections in favour of Mamata Banerjee